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OBJECTIVE: The purpose of the study was to evaluate 1) whether an underlying familial predisposition is shared by all anxiety disorders or whether specific risks are associated with specific disorders, and 2) whether panic disorder and major depression have a familial link. METHOD: The study compared four groups of children: 1) offspring of parents with panic disorder and comorbid major depression (N=179), 2) offspring of parents with panic disorder without comorbid major depression (N=29), 3) offspring of parents with major depression without comorbid panic disorder (N=59), and 4) offspring of parents with neither panic disorder nor major depression (N=113). RESULTS: Parental panic disorder, regardless of comorbidity with major depression, was associated with an increased risk for panic disorder and agoraphobia in offspring. Parental major depression, regardless of comorbidity with panic disorder, was associated with increased risks for social phobia, major depression, disruptive behavior disorders, and poorer social functioning in offspring. Both parental panic disorder and parental major depression, individually or comorbidly, were associated with increased risk for separation anxiety disorder and multiple (two or more) anxiety disorders in offspring. CONCLUSIONS: These findings confirm and extend previous results documenting significant associations between the presence of panic disorder and major depression in parents and patterns of psychopathology and dysfunction in their offspring.